credit trade business

The Credit Crisis: How We Got Here
Sometimes it is worth tacking a look at how we got into this mess in the first place. Reuters has a great recap in the video below. It began with a US housing problem that has quickly mushroomed into a crisis. In this video, Reuters explains how banks begin to tighten credit when a high percentage of subprime mortgages started to become overdue. The loan problem escalated and subprime lender New Century filed bankruptcy. These losses spread to larger banks that have had to write off billions of dollars of debt. Today, the credit problems have not gone away. Home prices are still dropping and inflation is a serious problem. The weakening economy is starting to impact growth and job creation. There are worldwide concerns that the U.S. will fall into a recession and this recessio nwill drag the global economy down with it.Direct video linkPermalink | Recent Headlines | WWFeeds.com

Dow Up Over 400 Points
News that the Fed is going to provide additional liquidity for the credit markets help boost stocks to huge gains today The Dow scored its best one day percentage increase in 5 years according to Reuters. The Dow climbed 416 on the day and the Nasdaq was up 86 points.At the same time cities are starting to feel the impact of the tough housing markets. There are more homeless people. There is more crime. There are less revenues for U.S. cites.The mortgage foreclosure crisis has caused a drop in cities revenues, a spike in crime, more homelessness and an increase in vacant properties, a survey of elected local officials out today shows.About two-thirds of 211 officials surveyed by the National League of Cities reported an increase in foreclosures in their cities in the past year, according to the online and e-mail questionnaire. A third of them reported a drop in revenues and an increase in abandoned and vacant properties and urban blight.Theres a reduction in revenues at the same time that more services are needed, says Cynthia McCollum, president of the National League of Cities and councilwoman in Madison, Ala., a suburb of Huntsville. Because of foreclosures, people are stealing, crime is on the rise and we dont have more money for cops on the street.The market had a boost today but the foreclosure crisis is worsening.Permalink | Recent Headlines | WWFeeds.com

Bernanke Says Some Small Banks May Fail
Federal Reserve Chairman Ben Bernanke said in testimony in front of U.S. Congress today that there could be some bank failures because of the ongoing credit crisis. The AP reports that Bernanke did says that the large U.S. banks will likely recover but it is disturbing to hear he expects some small bank failures.Bernanke, testifying before Congress, said that while the large U.S. banks will likely recover from the recent credit crisis, others could fail.Implying that some banks may fail stirs concerns for any investor whos familiar with financial and economic history, said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. Investors have been very edgy about credit market conditions and banks financial conditions. Very edgy. And this doesnt remove that edginess.Earlier, stocks had fallen in response to a Labor Department report that first-time unemployment claims rose last week by 19,000 to 373,000, the highest level since late January.Scott Wren, equity strategist for A.G. Edwards & Sons, said he still believes theres less than a 50 percent chance of a recession, but that its clear employers are cautious about hiring.To consistently see claims up near 400,000, thats pretty telling often-times of a recession, he said.On the positive side Bernanke doesnt anticipate a return to the stagflation periods of the 1970s - although with gas forecast to exceed $4 a gallon not everyone is convinced. Marketwatch reports that stocks are lower today following Bernankes words and news that last years GDP growth was just 0.6%Permalink | Recent Headlines | WWFeeds.com

Economy Growing Very Slowly
The GDP grew 2.2% in 2007 and slow 0.6% in the fourth quarter of 2007. Raw Story says economists were expecting 1.2% growth in Q4.For all of 2007, the economy grew by just 2.2 percent, the weakest performance in five years, when the country was struggling to recover from the 2001 recession. The housing collapse dealt the economy its biggest blow last year. Builders slashed spending on housing projects by 16.9 percent on an annualized basis, the most in 25 years.The economy has been subject to something of the perfect storm here. It has been hit by the housing slump the credit squeeze, the subprime slime and stock price declines on Wall Street, said economist Ken Mayland, president of ClearView Economics. The economy is weathering some pretty stormy seas but it is weak.The fourth-quarters performance was much weaker -- half the pace -- than economists were expecting. They were forecasting growth to clock in a 1.2 percent pace.The 0.6 percent annualized increase in gross domestic product GDP marked a big loss of momentum from the third quarters brisk, 4.9 percent showing. The fourth-quarter pace was the slowest since the first quarter of last year.IDEAglobals chief U.S. economist calls it stall speed according to MarketWatch.com. The GDP hit stall speed, wrote Joseph Brusuelas, chief U.S. economist at IDEAglobal.GDP hadnt been any slower since the end of 2002, when the economy was struggling to recover from the recession a year earlier.The 1st quarter 2008 GDP is going to be interested. Will the economy tread along, pick up speed or start to step into a recession?Permalink | Recent Headlines | WWFeeds.com

Bank of America to Buy Countrywide
Reuters reports that Bank of America is buying Countrywide for $4 billion.The purchase marks another acquisition for Bank of America Chief Executive Kenneth Lewis, who has spent more than $100 billion since 2004 to create the second-largest U.S. bank and the nations largest consumer bank.It also provides a lifeline for Countrywide, which became a poster child for what critics say were lending excesses that fueled the housing and credit meltdown.The largest U.S. mortgage lender has been convulsed by mounting losses and defaults, a loss of access to credit markets, and a slew of lawsuits and regulatory probes into its lending practices and Chief Executive Angelo Mozilos pay. On Tuesday, it denied rumors that it might go bankrupt.Countrywide has been hit very hard by the housing and credit problems. The deal is a big save for them and their shareholders but there are questions about what it means for Bank of America. SeekingAlpha says Bank of America will lose billions in the deal to acquire Countrywide. The Economist calls BofAs purchase a big gamble. Time will tell but it does sound like a risky acquisition.Permalink | Recent Headlines | WWFeeds.com

KB Home Posts $268 Million Loss - Wall Street Journal
KB Home Posts $268 Million LossWall Street Journal - 1 hour agoBy DONNA KARDOS KB Home swung to a fiscal first-quarter loss on charges related to write-downs and the abandonment of certain contracts, as the housing downturn and credit crisis continued to take their toll on the residential builder.KB Home posts quarterly loss ReutersKB Home swings to 1Q loss; revenue falls, misses expectations CNNMoney.comNewsweek - Centre Daily Timesall 100 news articles

Wholesale Prices Up 6.3% in 2007
The Labar Department reported today that wholesale prices roses 6.3% in 2007 - the largest increase in 26 years. The AP reports that big inflation increase could impact the Feds decision on whether or not to raise rates.The Labor Department reported that wholesale inflation was up 6.3 percent for all of 2007, reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.Meanwhile, retail sales fell by 0.4 percent in December, the worst showing in six months, the Commerce Department reported. Consumer confidence has plunged, reflecting the worsening housing slump and a lingering credit crisis.For inflation, the year ended on a more positive note, with wholesale prices falling by 0.1 percent in December. That reflected decreasing costs last month for gasoline and other energy products. It was a significant slowdown after prices had soared by 3.2 percent in November, which had been the biggest one-month increase in 34 years.The combination of rising inflation pressures and a weak economy represent a dilemma for the Federal Reserve over whether to cut rates to boost economic growth even at the risk of making inflation worse.Prices were moderating somewhat in December but that could have been the result of holiday sales and weaker energy numbers. It would be a mistake to say continued inflation is not a serious concern for 2008 especially with the spring driving season just ahead.Permalink | Recent Headlines | WWFeeds.com

Abu Dhabi Invests in Citigroup
The oil rich government of Abu Dhabi has decided to help save Citigroup from its credit woes. The IHT reports that the Abu Dhabi Investment Authority is purchasing a $7.5 billion stake in Citigroup.By agreeing to purchasing a $7.5 billion stake in the faltering banking giant Citigroup, the secretive, government-controlled Abu Dhabi Investment Authority is breaking with tradition.As the largest sovereign wealth fund in the world, with assets estimated at $650 billion, it poured money in the past into low-return, low-profile investments or small emerging market deals, unlike its flashy emirate neighbor, Dubai.But a falling dollar and a growing cash pile are spurring Abu Dhabi to change strategy, according to analysts, economists and deal makers, who said that more big-ticket deals might be ahead.Flush with cash from its oil exports, Abu Dhabi turned to Wall Street, using a complicated transaction late Monday to buy 4.9 percent of Citigroup, acquiring high-yield, convertible stock that must be exchanged for common stock between March 2010 and September 2011.Abu Dhabi will obtain a 4.9 percent stake in Citigroup with the investment. The move comes just after Citigroups shares hit a five-year low.Permalink | Recent Headlines | WWFeeds.com

Jobs Report Shows Weakening Economy
Yesterdays jobs report told a tale of weakness. The U.S. economy lost over 60,000 jobs in the short month of February and over 20,000 jobs in January. An AP article says the pink slips have increased and some economists hear the recession bell ringing.The grim snapshot of the countrys employment climate underscored the heavy toll the housing and credit debacles are taking on companies, jobseekers and the economy as a whole.It sounds like the recession bell is ringing for the U.S. economy, although it is still faint, said Stuart Hoffman, chief economist at PNC Financial Services Group.On Wall Street, stocks tumbled. The Dow Jones lost 146.70 points, a little more than 1 percent to close at 11,893.69. The Dow was down 370 for the last two days of the week.The worsening situation will prompt the Federal Reserve to cut a key interest rate deeply -- perhaps by as much as three-quarters of a percentage point -- at its next meeting March 18, or possibly sooner, to help brace the teetering economy, analysts predicted.The shower of pink slips was widespread. Factories, construction companies, mortgage brokers, real-estate firms, retailers, temporary-help firms, child day-care providers, hotels, educational services, accounting firms and computer designers were among those shedding jobs. All those cuts swamped job gains at hospitals and other health care sites, bars and restaurants, legal services and the government.President Bush was quick to reassure everyone that the economy is not in a recession. Bush said, I know this is a difficult time for our economy, but we recognized the problem early and provided the economy with a booster shot. We will begin to see the impact over the coming months.Less and less people are expecting the quick recovery that President Bush is. With the DOW falling under the 12,000 mark Friday next week could be a difficult one.Permalink | Recent Headlines | WWFeeds.com